5 Top NFT Trends (2023 & 2024)
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The NFT market is in flux.
After reaching record highs in early 2022, the market dropped dramatically and landed with annual revenue near $2.5 billion.
But the market is showing signs of recovery already in 2023. NFT trading volume hit $946 million in January 2023, the highest volume since June 2022 and a large increase over the final three months of 2022.
What lies ahead in this space? Take a look at our list of the five biggest trends in the NFT space and see what’s expected to change in the next 12-18 months.
1. Major Companies Affirm Their Commitment to NFTs
Although NFT trading is dramatically down from its high in January 2022, several major companies still see potential in the market and have recently announced new NFTs strategies.
To start, Amazon is in the process of launching its own NFT marketplace: Amazon Digital Marketplace.
Search interest in Amazon NFTs increased dramatically in 2022.
Despite a delay caused by the collapse of FTX, the company says the marketplace will open in the spring of 2023.
Amazon’s NFT strategy has been delayed, but reports say it's nearly ready to launch.
Initial reports say the focus will be on fashion NFTs linked to real-world products and blockchain-based gaming.
In addition, the marketplace won’t require a crypto wallet—customers can simply pay with a credit or debit card. Amazon hopes this will draw more non-tech people into the marketplace.
In the B2B world, Salesforce is integrating NFT loyalty programs into its CRM platform.
The company already has a Web3 integration that businesses can use in order to deploy smart contracts and manage blockchain data.
Salesforce gives businesses a ready-to-go platform for launching NFT loyalty programs.
The NFT portion of this will enable companies to create tokens and monitor the performance through the Salesforce platform.
The new feature has already been tested with customer-facing corporations like Mattel and Crown Royal.
Starbucks is already seeing successful results from its late-2022 NFT launch, branded Starbucks Odyssey.
The NFT program is a Web3-oriented reboot of the coffee chain’s loyalty program.
Customers log in as usual, but now, they’re able to go on “journeys,” like playing games or signing up for challenges. As they complete journeys, they earn “journey stamps” (NFTs). These stamps unlock benefits for the customers.
In March 2023, Starbucks offered 2,000 NFTs for direct purchase. They sold out in less than 20 minutes.
The first direct-purchase NFTs from Starbucks were released under The Siren Collection.
The NFTs are now being sold on the secondary market for nearly $2,000 a piece.
Search interest in Polygon Technology is up 1,800% over the past five years.
2. Consumers Look to Rare and Tangible NFTs for Long-term Value
Like other collectibles, a NFT has value because a community of people believe it has value.
With the recent downturn of the crypto market, however, many have taken notice that the value of NFTs can be quite unstable.
Still, some are betting on long-term value and purchasing certain NFTs with the hopes that they will deliver financial gains over time.
Scarcity is a critical factor in determining the long-term value of an NFT.
Rare NFTs are inherently more valuable than others.
For example, Moonbirds launched an NFT collection in April 2022 that featured 10,000 digital owls. The project was led by internet entrepreneur Kevin Rose.
Search volume spiked in 2022 when Moonbirds released NFTs.
The first 2,000 NFTs were reserved for members of Proof Collective, a private group of NFT collectors and artists.
The remaining owls were released via a raffle, which required individuals to have at least 2.5 ETH already in their wallets.
The sale of these NFTs netted Moonbirds about $60 million and the secondary sales had already totaled $300 million just a few days after the launch.
Among the NFTs was Moonbird #668, the rarest Moonbird of them all.
It’s a glitch NFT with the feather trait, two features that make it truly one-of-a-kind in this sought-after collection.
The NFT originally sold for $7,239.
Moonbird #668 is one of only six to have a glitch red background.
Tangibility and long-term utility are two other qualities that underpin the value of an NFT.
In essence, the NFT is more valuable if it provides access to something desirable in the real world.
These are aptly called utility NFTs.
Search volume for “utility NFT” is up more than 1,400%.
Many companies are granting NFT holders access to private events or limited-release products.
Cocky NFTs connect people to exclusive concert events.
The Cocky NFT takes the form of a soda can. The lid color designates VIP status.
The company plans to release 10,000 NFTs that will take the form of uniquely designed soda cans.
The more events NFT holders attend, the more unique (and valuable) their cans become. This increases the rarity, and thus the value, of the NFT.
Cocky is also setting up a second-hand NFT marketplace on their site in order to drive demand.
The pre-mint sale began in September 2022 and the first event is slated for 2023.
Cuvée Collective is applying a very similar business model in selling NFTs to wine lovers.
The Collector NFTs provide holders with access to concierge services, a Sommelier hotline, exclusive wines, events, and giveaways.
They also offer NFTs dedicated to specific partner wineries. These NFTs come with access to exclusive tasting events and tours.
Some NFTs provide access to real-life events like wine tastings and tours.
3. Real Estate Industry Uses NFTs to Cut Out Middlemen
Some companies are investing in transformational new ways to use NFTs in business.
The blockchain technology behind NFTs makes them ideal for certain business operations that are inefficient or document-heavy.
The real estate industry is one example.
NFTs can be used in various ways in the real estate industry.
NFTs make real estate transactions faster and easier. A process that usually takes months can now be completed almost instantaneously.
And, selling via NFT is much more cost-effective.
Nearly 10% of a property’s price goes to the actual cost of selling it. This includes document fees, processing fees, recording fees, and more.
With NFTs, most of these processes and fees are automated via blockchain.
There’s also more transparency when using NFTs.
Potential buyers or investors can see a wealth of information on the blockchain: previous owners, pricing history, tax records, legal disputes, and other useful details.
Propy is one startup that’s built their brand on automating real estate sales using NFTs and cryptocurrency.
Propy enables homeowners to buy or sell a home with just a few clicks.
Since launching in 2016, the company has brought in $5 billion in property transactions and raised nearly $17 million in VC funds.
The company also facilitated the first home sold as an NFT in 2022.
Even though it is currently possible to sell a full home as an NFT, the most popular way NFTs are being used in real estate today is through fractionalization.
Consumers are essentially buying shares in a piece of real estate.
Search volume for “fractional ownership” is up 62%.
Holders can receive financial benefit from that NFT when they sell it, or they may also earn rental income or profit splits from the property.
Metropoly is an example of a company facilitating the sale of fractionalized tokens in the real estate industry.
Metropoly offers fractionalized ownership of real estate via NFTs. In total, $19 million has been paid out to users so far.
Individuals can purchase a share in a property for as little as $100. The NFTs can also be bought and sold on their marketplace.
4. Soulbound Tokens Present a Different Type of NFT
A new branch of NFTs is SBTs—soulbound tokens.
Search volume for “soulbound token” has increased 220% since 2019.
The concept was announced in a 2022 white paper written by Ethereum co-founder Vitalik Buterin, along with an economist and a lawyer.
Unlike NFTs, soulbound tokens are non-transferable. They’re held in private crypto wallets known as Souls and they cannot be sold.
The purpose of SBTs is to symbolize an achievement or part of an individual’s identity and reputation.
For example, medical records, job history, credit history, and memberships could all be held by individuals in the form of SBTs.
SBTs have the potential to verify everything from college degrees to criminal history.
Proponents of this technology say it could help prevent theft, scams, and other fraudulent actions.
SBTs could be self-verified, like an employment history, or they could be issued by institutional Souls like universities or companies.
SBTs also have the potential to improve on Proof-of-Attendance-Protocol (POAP) NFTs.
Search volume for “POAP” is up more than 200% since 2019.
These NFTs are given to people who’ve attended a certain event like a concert or a conference. They’re mostly used in loyalty and rewards programs.
They are stored in an individual’s crypto wallet but, as of now, they’re still transferable.
SBTs could add a layer of security to POAP and potentially eliminate ticket scalping and forging.
Overall, this branch of NFTs is still in its infancy. However, Binance launched the first SBT in August 2022. It’s called the Binance Account Bond (BAB).
The BAB token is the first-ever SBT on Binance.
This token verifies that a user has passed through Binance’s know-your-customer protocol.
5. Regulation and Legal Battles Increase
Because NFTs are a fairly new phenomena, regulations and legal repercussions have been lagging behind the market.
But with a host of million-dollar transactions, the NFT market couldn’t stay under the radar for long.
The Department of Justice, the Securities and Exchange Commission, and other regulators are now attempting to catch fraud and reign in the industry.
In mid-2022 the DOJ indicted Nathaniel Chastain, a former employee of OpenSea, on charges of wire fraud and money laundering. They argue he was participating in insider trading with NFTs.
Search volume for “OpenSea” spiked in recent months.
Six individuals involved in a massive NFT scheme were also arrested in mid-2022.
The group named Baller Ape Club claimed to sell NFTs but then disappeared, deleted their website, and took the $2.6 million they had collected from the mint and laundered it through several types of cryptocurrencies.
Aside from catching criminal activity, regulators are attempting to properly classify NFTs as securities, commodities, or something else entirely.
The SEC recently began investigating Yuga Labs (creator of Bored Ape Yacht Club) in order to determine if their NFTs should be treated as securities or not. But the company hasn't been accused of wrongdoing.
The SEC began investigating Yuga Labs in late 2022.
Cryptocurrency is considered a commodity by the Commodity Futures Trading Commission, so it follows that NFTs might be treated the same.
But some NFTs are also providing an expectation of financial profit, which makes them securities.
Fractional NFTs could even be legally treated as investment contracts.
Another major issue with the regulation of NFTs is copyright and the principle of digital-first sales.
As of now, the secondary market for NFTs is technically illegal because of copyright law.
That’s because of first-sale doctrine, which states that an individual can sell their own property even if it contains copyrighted material. But an individual cannot sell copyrighted material in a digital format.
The law is read this way because the U.S. Copyright office has no method to ensure that the file is deleted once it’s sold and transferred. There could be countless copies of a copyrighted digital product.
1/6 🚨 That cool NFT you bought on @opensea was an illegal transfer (without prior agreement) due to a loophole in copyright law: there is no “digital first sale” doctrine. So NFT creators could legally claw back secondary sales, under current law, leaving you with nothing 🤷🏻♂️— JoshuaDurham.eth (@JoshuaLDurham) February 27, 2023
This doesn’t apply to NFTs because blockchain prevents the reproduction of an NFT, but the law still stands as-is.
Regulation gets even more complicated when considering who actually owns the copyright and has a claim to the intellectual property of an NFT.
And, the NFT is never really protected under the law unless the creator goes through the official legal process of copyrighting it.
When it comes to the large majority of NFT sales, details regarding these legal implications are murky at best and difficult for the average consumer to understand.
Lastly, there’s the issue of royalties.
Search volume for “NFT royalties” recently spiked.
Creators do have the ability to create smart contracts that ensure royalties on the NFTs they sell.
The royalty is usually between 2.5% and 10% of the NFT price.
However, the name “contract” is a bit of a misnomer. These contracts are not enforceable by law.
And, in the face of a bear market, some marketplaces have made royalties optional in an effort to attract more customers.
These platforms, like Magic Eden, X2Y2, and LooksRare, give buyers the option to honor the smart contract or not.
LooksRare royalty fees are down to nearly zero.
That wraps up our list of five of the top NFT trends for 2023-2024.
The market may be down overall, but new developments and investments by major companies may be enough to keep interest going in the months to come. That’s certainly true for the real estate industry and others that are looking to capitalize on new use cases for NFTs and blockchain technology.
In addition, this market slowdown may be good news for regulators who hope to gain some breathing room in sorting out criminal activity and legal issues surrounding NFTs.